Over two years, Congress introduced legislation to protect veterans from “pension poachers” by actually penalizing veterans for making transfers of assets. Those bills were S. 3270/H.R. 6171 (112th Congress) and S. 748/H.R. 2341 (113th Congress). Both bills died in Congress. The Veterans Administration drafted and issued proposed law changes, without Congressional approval, on January 23, 2015: Federal Register Vol. 80, No. 15, Part IV, 38 CFR Part 3, Net Worth, Asset Transfers, and Income Exclusions for Needs-Based Benefits. Over 900 public comments were submitted to the VA overwhelmingly in opposition to the proposed changes. One specific argument was that the VA did not have independent authority to make such changes and needed Congressional approval.
Apparently the VA agrees, so it secured the support of a few senators to craft a bare-bones House Resolution 4351. That resolution, called the “Veterans Care Financial Protection Act of 2016,” would carte blanche approve any “standards” developed and implemented by the Veterans Administration “that protect individuals from dishonest, predatory, or otherwise unlawful practices relating to increased pension available … on the basis of need for regular aid and attendance.”
Should this resolution pass, all of the proposed changes to Title 38 of the Code of Federal Register, as drafted by the Veterans Administration, affecting veterans, imposing transfer penalties of up to 10 years, would become law.
One glaring problem, as I see it, is that neither the bill nor the proposed changes in Title 38 define “dishonest, predatory, or otherwise unlawful practices.” A financial advisor who sells a product is within his right to do so if it meets financial goals and the federal suitability requirements. Lawyers who draft estate planning documents, licensed to do so in the state where the client resides, are acting lawfully. Certainly, misrepresentation that a trust or an annuity is required in order to get VA benefits is dishonest. But making transfers of assets to trusts and the purchase of an annuity itself are not unlawful. Holding educational seminars is not predatory.
This is yet another example of a poorly drafted piece of legislation designed to appeal to the emotions of the ignorant, and it purposely does not adequately explain the consequences for or against the cause.
Veterans are being harmed by the changes in the laws, not protected. If the VA and the select few Congressional members truly wanted to protect veterans, they would leave the VA pension plan rules as they are and sanction the advisors who are using unethical practices or committing illegal acts. If the VA and Congress wanted to protect veterans, they would allocate their time and resources to making the application and appeals process, and healthcare system, efficient and consumer friendly instead of making it harder for veterans to qualify for deserved benefits.
Let your representatives know the real issues behind the reason for this new resolution. Urge them not to pass this blindly – know what the proposed rules are that affect pension benefits and veterans.
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Victoria L. Collier, Co-Founder, Lawyers with Purpose, LLC, www.LawyersWithPurpose.com; Certified Elder Law Attorney through the National Elder Law Foundation; Fellow of the National Academy of Elder Law Attorneys; Founder and Managing Attorney of The Elder & Disability Law Firm of Victoria L. Collier, PC, www.ElderLawGeorgia.com; Co-Founder of Veterans Advocates Group of America; Entrepreneur; Author; and nationally renowned Presenter.